Oil field to be ‘a money machine’

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Norway’s giant Johan Sverdrup oil field, located just 155 kilometers west of Stavanger, is being called “a money machine” even before production starts up next year. New estimates suggest it can generate a whopping NOK 9 million per hour at today’s oil price of around USD 65 a barrel.

That price is still far below the levels reached several years ago, but it’s risen from the depths that forced oil companies and suppliers to dramatically cut costs. Newspaper Aftenposten reported over the weekend that Johan Sverdrup will thus gush more profits for its operator and major owner, Statoil, and the Norwegian state itself.

“It’s a fantastic field,” Margareth Øvrum, director of projects and technology for Statoil, told Aftenposten. Development costs for the Johan Sverdrup field have been dramatically cut, from the NOK 125 billion approved by Parliament to NOK 88 billion, accordng to Statoil’s most recent calculations.

Statoil also has estimated that the field can be profitable at an oil price of just USD 29 a barrel. With North Sea crude oil now selling at more than twice that, and an exchange rate of around NOK 8 to the dollar, Sverdrup can generate profits of NOK 9,617,657 every hour when production hits 660,000 barrels a day. The field is expected to produce oil for around 50 years from 2019, generating 14,000 jobs during its development and around 3,000 full-time-equivalent jobs once operations begin.

newsinenglish.no staff